Post Office FD Interest Rates

Post office FDs are one of the saving systems by the Indian postal service. It provides depositors with a safe and convenient method to save money if they don't have access to banks. Indian Postal Department is also known as India Post which provides its customers with Fixed Deposit options to park their surplus money and earn interest on it. The Post Office FD interest rates are one of the best rates for fixed deposits offered in India.

The frequency of people opting for post office fixed deposits is more in rural areas as compared to bank deposit schemes. The minimum deposit to be made is as low as Rs. 200 whereas there is no maximum limit under this scheme. However, the deposits made between these limits

Post Office FD Rates 2024

Features and Benefits of Post Office FD

• The post office fixed deposits’ tenure ranges from 1 year to 5 years
• Depositors can open multiple FD accounts in any of the post offices
• Minors of 10 years of age or more can also open and manage these accounts as well
• Minors, however, will have to apply to convert the account in their name once they hit 18 years
• The minimum deposit amount needed to open a post office FD is Rs. 200
• There is no cap on the maximum deposit amount
• Joint account can also be opened by individuals, given that the account holders are two adults
• Depositors can convert these accounts from single to joint and vice versa as per the need
• Deposits made for a tenure of 5 years are eligible for tax benefits under section 80C of the Income Tax Act of India, 1961
• Post Office fixed deposits can be easily transferred from one post office to another
• The account gets renewed automatically upon maturity for the same period as it was opened previously. However, the interest rate will be applicable on the day of maturity.
• NRI depositors cannot open a fixed deposit account in the Indian Post office
• Nomination can be done at the time of opening the account. However, one can nominate even after opening the account
• The account can be opened with both cash and cheque. If a depositor opts for a cheque deposit, the date of payment of the cheque in the account of the government should be the date of opening the FD account.

Post Office vs Other Banks' FD Rates

How to invest in Post Office FD?

A Post Office FD can be opened in any post office across India using online and offline methods-

1) Online Method

The Post Office Fixed Deposit account can be opened online by using internet banking-

• One needs to visit the official e-banking portal of the post office at ebanking.indiapost.gov.in.
• For logging in to the portal, use your registered ID and password.
• Click on the ‘Service Request’ under the ‘General Services’ tab.
• Follow the directions present on-screen and click on the ‘New Request’ option to start the Post Office Fixed Deposit opening request.

2) Offline Method

One can visit the nearest India Post branch and collect the form for opening a new Post Office Fixed Deposit account. After submitting the copies of the necessary documents with completely filled-up forms, the post office administrators will guide you regarding the additional directions for the process.

Eligibility to Open a Post Office FD Account

The following people are eligible to operate a Postal fixed deposit -

• Indian residents can manage such investments, either individually or jointly.
• Minors are eligible for Post Office fixed deposit scheme investments as well, managed by their legal guardian.

NRIs, trusts, companies and other organisations, however, are not allowed to avail fixed deposit investments through Post Office.

Documents Required to Open Post Office FD

Investors must furnish the following documents to deposit in the POTD scheme -

• Proof of Address

• Telephone bill
• Electricity bill
• Bank statement inclusive of cheque
• Post Office issued ID or certificate
• Passport

• Proof of Identity

• Voter ID
• Pan card
• Aadhaar card
• Driving license
• Photo ration card
• Passport

Moreover, the investor must provide details of a nominee for the FD. A witness must be present when he/she signs the investment papers as well.

Tax on Post Office FD

The 5-year Post Office FD or National Savings Term Deposit qualifies for a tax deduction under section 80C. It offers a tax deduction of up to Rs 1,50,000 of the deposit.

Note that the post office fixed deposit interest will be taxable for the depositors. The interest is taxable for those taxpayers whose age is less than 60. Although, interest up to Rs 50,000 is entirely exempt from tax for senior citizens above the age of 60.

Loan Against Post Office Fixed Deposit

Loan against FD of India Post Office provides the loan up to 90-95% of the Fixed Deposit amount. The interest charged on loan against FDs are typically low and are around 2-3% higher than the Fixed Deposit interest rate.

Premature Closure of Post Office Fixed Deposit

An investor can withdraw after six months from the date of deposit. Before this period, no withdrawals can be made.

Note that if an investor makes a premature withdrawal after the expiry of 6 months but before 12 months, then interest will be payable for the completed months.

Any interest already paid to the depositor will be recovered from the deposit repayment amount and the interest payable on the withdrawal amount.

FAQs

What is the highest interest rate Post office fixed deposit offers?

Currently, the highest interest rate offered by post office fixed deposit is 7.50% for 5 years’ tenure.

What is the minimum deposit required to open a post office fixed deposit account?

The minimum amount required to open a Post office FD account is Rs. 200.

Can we take a loan against Post Office FD?

No, this facility is not available in post offices to date.

What are the documents needed to open a fixed deposit account in a post office?

You should have the following documents to open a post office fixed deposit account:

• Photo ID Proof that includes Aadhaar Card, Voter ID Card, etc.
• Address Proof that includes Electricity Bill, Water Bill, Ration Card, Aadhar Card, etc.
• PAN Card
• Passport size photographs (2 or more)